By Pete Baltaxe
Angel investing is typically expensive. If you are a member of an organized angel group, you are expected to make investments in the $25,000 to $50,000 range. The same is true for investing in a legitimate angel round on your own. And to have a hope of making money at angel investing, you need to invest in something like 20-30 deals to have a decent chance that one will make a big return and more than cover the total loss of many of the others. So that's $250K to $500K for 10 deals. You need to be comfortable rolling big dice. If you join Seattle Angel Conference as an accredited investor, and then you can roll dice for $5500 a pop. It's a good way to see if you enjoy the process, and enjoy making the bet on an entrepreneurial team; or if it just not a comfortable place for you.
You're not alone as a noob
Most of the investors who participate in the Seattle Angel Conference LLC are new to angel investing. There are no dumb questions. There are a few experienced angel investors who act as mentors, and who are also participating in the investment. A lawyer walks through the term sheet in one of the sessions, so you can ask as many questions as you like.
It is good for benchmarking startups
If you haven't been exposed to a lot of startups, it can be hard to know what a solid team should look like, or how fleshed out a business model or go-to-market strategy should be. How much customer traction should you expect, how polished a product? What evidence of real innovation or defensible intellectual property is "normal" at this early stage? Seeing 20 or more companies in a few weeks will help you get a feel for what looks like a solid early bet versus an untested idea or partial team.
You learn something
With 20-40 smart people in the room, you will learn about technical or business or industry considerations for each startup that you would not have been aware of on your own. You get the benefit of seeing how other people view this opportunity, some of whom will have experience in the specific field, some of whom will have insight into the marketing or business development challenges that a company might face, and some of whom may just have looked at enough companies to be impressed by what the team has accomplished in a short time.
It's great for networking
If you are interested in startups, SAC is a great way to meet 20-40 other people in the Seattle area who are interested in startups; and since these are accredited investors, they are typically successful business people or technologists. You also get to meet the founders of about 20 startups through the vetting and due diligence process.